BT rings up £1.08 billion boost for the Scottish economy

Trainee engineers are put through their paces at BT’s Scottish Training Centre in Livingston.

BT has given a massive £1.08 billion boost to the Scottish economy in the past year, according to an independent study published today.

The report, by Regeneris Consulting, highlights the huge local impact of BT’s activities including its takeover of EE, which has reinforced the communications company’s position as one of the nation’s leading employers.

It revealed BT supported around 12,600 jobs in Scotland through direct employment, spending with contractors and suppliers and the spending of employees.

The report has been welcomed by CBI Scotland.

Hugh Aitken, CBI Scotland director, said: “This latest research demonstrates the extent to which BT plays a key role in our local communities throughout Scotland. There is not a businessperson or family in Scotland who – directly or indirectly – is not affected by BT’s activities as a supplier of essential services, such as superfast broadband, major employer, investor or purchaser.

“In a competitive world, in which trade and relationships increasingly transcend regional and national boundaries, rapid and effective communications are ever more vital.”

In employment terms, BT and EE’s impact in the 2015-16 financial year was larger than Scotland’s insurance sector.

Nearly 7,400 people are directly employed by BT and its EE business – equivalent to one in 7 employees working in the nation’s IT and communications sector. Around £171 million was spent with Scottish suppliers.

The overall economic impact of BT and EE activities is expressed as a “Gross Value Added” (GVA)* contribution. For Scotland this combined GVA totalled £1.08 billion – equivalent to £1 in every £125 of the nation’s total GVA.

‘The Economic Impact of BT and EE in the UK’ outlines the combined economic contribution of the two companies across Scotland, Wales, Northern Ireland and the English regions in the financial year 2015-16.

Tim Fanning, associate director of Regeneris Consulting, said: “Our latest analysis has shown that, together, BT and EE contributed around £1 in every £70 of economic output in the UK in 2015/16. This is clearly a very substantial combined economic footprint. Moreover, this contribution is spread throughout communities up and down the country.”

Brendan Dick, BT Scotland director, added: “Few organisations have a more positive and direct impact on the local economy and Scotland’s communities than BT.

“The acquisition of EE means we can invest even further, enabling people living and working in Scotland to get access to the best communications - fixed line, mobile and broadband services - now and in the future.

“As well as providing the means for families, homeworkers, companies and other organisations to communicate and do business in new and exciting ways, BT is helping to support other firms and suppliers in Scotland with the company’s procurement and overall expenditure and the spending of its employees.”

The report highlights that BT, including EE, in Scotland was responsible for the employment of around 7,400 people and contractors in 2015-16 - with a total income of around £225 million, and provides work for a further 5,170 people through spending with businesses that supply equipment and services, as well as through the spending of its staff.

The company employs staff in every part of the country. Key local centres include: Edinburgh, Glasgow, Dundee, Aberdeen, Alness and Thurso.

Openreach – BT’s local network business – which provides services for hundreds of communications companies and their customers, recently completed the recruitment of around 220 extra engineers and apprentices in Scotland to help install new lines and clear faults more quickly.

The new recruits are also working on rolling out fibre broadband to more households and businesses beyond the more than two million premises in the country, which already have access to the high-speed technology.

BT’s investment of more than £3 billion in fibre broadband across the UK includes the company working in partnership with Government, local authorities and other bodies to help make the technology even more widely available across the country, especially in rural areas.

In Scotland, BT is the private sector partner in the Digital Scotland Superfast Broadband partnerships, led by Highlands and Islands Enterprise in their area and the Scottish Government in the rest of Scotland, which alongside commercial investments will deliver faster fibre broadband to around 95% of Scottish premises.

Earlier this year, BT announced Openreach and EE would invest around £6 billion more over the next three years in the first phase of a plan to extend superfast broadband and 4G coverage beyond 95 per cent of the UK by 2020.

The company also aims to make ultrafast broadband available to up to 12 million UK homes and businesses by the end of 2020 using G.fast, offering speeds of 300Mbps to 500Mbps, and fibre to the premises (FTTP) technologies. In Scotland, Openreach’s G.fast pilot is being extended to Glasgow Langside and Edinburgh Donaldson exchange areas.

UK-wide, BT and EE’s total GVA contribution in 2015/16 is assessed at £23.1 billion. The company supports 259,000 jobs directly and indirectly. BT and EE’s full economic impact is equivalent to £1 in every £70 of GVA in the UK economy and one in every 95 UK employees.

*Gross Value Added (GVA) measures the value of all goods and services produced in an economy. GVA combines wages and operating profits from companies and other organisations. Growing GVA can reflect improvements in workforce skills, productivity, R&D and innovation. The figures for BT show the value added directly through BT's services and additional value generated through BT's suppliers across the nations and regions.

About BT

BT’s purpose is to use the power of communications to make a better world. It is one of the world’s leading providers of communications services and solutions, serving customers in 180 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to its customers for use at home, at work and on the move; broadband, TV and internet products and services; and converged fixed-mobile products and services. BT consists of six customer-facing lines of business: Consumer, EE, Business and Public Sector, Global Services, Wholesale and Ventures, and Openreach.

For the year ended 31 March 2016, BT Group’s reported revenue was £19,042m with reported profit before taxation of £3,029m.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on stock exchanges in London and New York.

Regeneris Consulting is an independent economics consultancy that provides research-based advice to major corporates, developers, national Government bodies and local Government. Regeneris specialises in preparing robust assessments of economic impact, focusing on the impact of new technology, physical developments, policy changes, investment programmes and corporate economic footprint. Regeneris work across the UK from their offices in London and Manchester. See: www.regeneris.co.uk for further information.